Infringement Actions

In Australia, patent infringement actions may be commenced by the patentee, an “exclusive licensee”, or both. If an exclusive licensee commences proceedings and the patentee does not consent to being an applicant, the patentee must be joined as a respondent.

To have standing as an “exclusive licensee”, the court must be satisfied that the licensee has been authorised to undertake all relevant acts of exploitation in Australia, to the exclusion of all others. This is a question of fact, usually proved by simply tendering the exclusive licence agreement. An exclusive licensee may apply to record its interest in a patent on the Register of Patents. However, a failure to do so does not undermine an exclusive licensee’s standing to sue.

Where a patent is co-owned by two or more persons, and one patentee intends to commence infringement proceedings, the Patents Act 1990 (Cth) (the “Patents Act”) does not expressly provide for whether the other patentees must also be parties to the proceeding. However, if an exclusive licensee is a party to the proceedings, then all patentees must be joined either as co-applicants or respondents.

Revocation Actions (Sections 138 and 139 of the Patents Act)

Any person may commence proceedings seeking revocation of a patent. There is no requirement that infringement proceedings are also pending. In practice, however, the applicant in revocation proceedings is often an alleged actual/threatened infringer. The patentee, as well as any person claiming an interest in the patent (eg, an exclusive licensee whose interest is recorded on the Register of Patents), are parties to revocation proceedings. Notice of the application for revocation must also be served on the Commissioner of Patents, who has the option of appearing and being heard.

Infringement proceedings may be brought against any person engaging in any relevant infringing acts in Australia (see 2.1 Infringing Acts).

In practice, however, infringement proceedings are typically brought against the Australian sponsor of the therapeutic goods, the sale and supply of which is alleged to infringe the patent. Other entities involved in the supply chain, such as manufacturers or local distributors, are also sometimes sued.

Patents claiming methods of treatment are valid in Australia, which means that, occasionally, doctors and hospitals may technically infringe certain patents. However, for commercial and other reasons, infringement proceedings are almost never brought against those persons.

In any patent infringement or revocation proceedings, the Commissioner of Patents must be served with the initiating court documents, and may appear and be heard in the proceedings.

General

Preliminary injunctions (or “interlocutory” injunctions, in Australian parlance) (PIs) are available in Australia, to restrain any actual or threatened infringement of the patent (see 2.1 Infringing Acts). The application for a PI may be made with or without notice to the respondent, although in pharmaceutical patent cases, the application is usually made on notice and the respondent given an opportunity to file affidavit evidence and make submissions.

Timing

A PI application may only be made as part of a substantive infringement proceeding, and is usually filed together with the initiating court documents of an infringement proceeding. Depending on the urgency of the matter, the hearing of the PI application usually occurs within three to six weeks of filing, with a decision on the PI application delivered within one to two weeks of the hearing. If there is an imminent deadline (such as an intended product launch date), the court will usually accommodate a sufficiently truncated timetable and hearing date.

Grounds

To seek a PI, the patent relied upon must have been granted (or, in the case of an innovation patent, granted and certified). To date, Australian courts have not decided whether an applicant may obtain a PI on the basis of a patent application alone, such as if an opposition has been unsuccessful but the resulting patent has not yet been sealed.

In deciding the PI application, the court will assess two main considerations, namely:

• whether the applicant has a prima facie case with a probability of success sufficient to justify the court making an order to preserve the status quo; and
• whether the balance of convenience favours granting the injunction. That is, a comparison between the inconvenience to an alleged infringer if he is restrained and later found to have been acting lawfully, and the inconvenience to the applicant if the alleged infringer is not restrained but later found to have infringed (which includes an assessment of whether damages would be an adequate remedy).

The court will also assess the overall justice of the case, and take into account discretionary considerations such as any relevant delay on the part of the applicant.

In cases where the alleged infringer would, but for the injunction, become the first generic or biosimilar product to enter the Australian market, the balance of convenience often weighs heavily in favour of the patentee/innovator, due to the significant and irreversible price consequences that occur upon the listing of a first new brand of an existing pharmaceutical item under Australia’s Pharmaceutical Benefit Scheme. The pricing consequences under the PBS are complex, and are often the subject of evidence adduced in relation to applications for PIs.

Protective Letters

Australia does not have a protective letters system. However, as mentioned above, most PI applications in Australian pharmaceutical patent cases are heard and determined on notice, affording both parties an opportunity to adduce evidence and make submissions.

Patent infringement and revocation proceedings are generally heard and determined together, by the same court and judge, with all issues of construction and validity determined within a single judgment. In cases where the applicant seeks pecuniary relief, it is common for all issues of liability to be heard and determined separately and prior to the quantification of any damages or account of profits.

Proceedings before the Australian Patents Office do not prevent a person from commencing revocation proceedings in a relevant court. The existence of pending court proceedings generally requires the Patent Office to stay any pending opposition proceedings until such time as the court proceeding has been finally determined.

Time to Commence Proceedings

An action for patent infringement must be commenced by the later of:

• three years after the date on which patent was granted; or
• six years after the date of the act of infringement.

A patentee enjoys exclusive rights in the period commencing on the day on which the complete specification becomes open to public inspection, and ending with the ceasing or expiry of the patent. Section 57 of the Patents Act allows a patentee to, after grant, sue for infringements committed prior to grant but after the patent became open to public inspection, if those acts fall within the scope of the patent claims as granted.

There is no direct time limit on when a person may commence revocation proceedings. However, any counterclaim seeking revocation should generally be filed at the same time as the defence to any infringement claim – an attempt later to seek revocation only after the conclusion of infringement proceedings is likely to be struck out as an abuse of process.

Service

An applicant must serve the initiating court documents on the respondent. In the Federal Court of Australia, which is where the majority of patent matters are heard, service must be effected as soon as practicable and at least five days before the first return date fixed in the Originating Application. In urgent proceedings, the court may make orders abridging the time for service.

Pleadings

The Federal Court Rules establish a default timetable for the filing of pleadings, referable to the dates of service: defence to be filed within 28 days after service of the statement of claim, and any reply to be filed within 14 days of service of the defence. In practice, however, the court tends to make orders establishing a bespoke timetable, taking into account factors such as the availability of the court and the parties’ representatives, any urgent interlocutory matters, and public holidays, etc.

Progress Through to Trial

The Federal Court operates a docket system, whereby each proceeding is generally case managed, heard and determined by the same judge from start to finish. The docket judge will set the pace for how rapidly or otherwise a matter will progress through to trial and judgment at first instance. The court will usually schedule regular case management hearings throughout the proceeding, to ensure the matter is progressing in accordance with the timetable, and to rule on any interlocutory disputes between the parties.

In a typical patent infringement/revocation proceeding, the matter may be listed for trial to take place anywhere between 12 and 24 months from the commencement of the proceeding. The timing depends significantly on the complexity of the issues in dispute, the judge’s availability for hearing time, the extent of any contested interlocutory applications (such as discovery), and the length of trial required to accommodate the cross-examination of each party’s witnesses.

Judgment

There is no deadline by which judgment must be delivered following trial. In a typical patent infringement/revocation proceeding, judgment would be delivered around six to twelve months after the trial concludes, although there are exceptions (both shorter and longer).

A main infringement action may be filed as soon as both:

• the patent relied upon has been granted (or, in the case of an innovation patent, granted and certified); and
• the applicant has a proper basis for alleging that the respondent has engaged in relevant acts of exploitation (see 2.1 Infringing Acts), or has threatened to do so.

In some cases, publicly available material will not be sufficient to support an allegation that the respondent’s conduct infringes a claim of the patent. This is particularly common for formulation patents, or patents claiming methods/processes used in the manufacture of biologic or biosimilar medicines, where the formulation and manufacturing information is invariably highly confidential. In these circumstances, a patentee may first need to commence proceedings seeking an order for preliminary (ie, pre-action) discovery from the prospective respondent (see 1.7 Pre-action Discovery/Disclosure).

A patentee may sue for infringements that occurred during the term of the patent following the granting of the patent, and may also sue for infringements that occurred prior to grant but after the date on which the patent became open for public inspection: Section 57 of the Patents Act.

Pre-action discovery is available in Australia, by application to the Federal Court under Rule 7.23 of the Federal Court Rules 2011 (Cth). Under that provision, a prospective applicant may apply to the court for an order for preliminary discovery from a prospective respondent if it can establish that:

• the prospective applicant has a reasonable belief that it may have a right to relief in the court;
• after making reasonable inquiries, the prospective applicant requires further information before it can decide whether to commence a substantive infringement proceeding; and
• the prospective respondent is likely to hold documents directly relevant to the question of whether the prospective applicant has a right to obtain the relief, which would assist in making the decision to commence a substantive proceeding.

Except with leave of the court, documents obtained by a party pursuant to an order for preliminary discovery may only be used for the purpose of that proceeding and any substantive proceeding that follows, and no collateral or ulterior purpose: Hearne v Street (2008) 235 CLR 125, citing Harman v Secretary of State for the Home Department [1983] 1 AC 280.

In light of the availability of pre-action discovery (see 1.7Pre-action Discovery/Disclosure), search and seizure orders are uncommon in life sciences and pharma/patent matters. However, Australian courts do have powers to make orders for the inspection and preservation of property; orders allowing an applicant to enter a respondent’s premises to inspect, remove or make copies of documents; and orders to force disclosure of persons with whom the respondent has had dealings. The legal source of these powers, and the relevant procedural rules, differ between different Australian courts (eg, state versus federal courts).

To obtain an order of this nature without notice (ie, an “Anton Piller” order), the applicant must generally demonstrate a strong prima facie case, that serious damage has been (or would likely be) suffered by the applicant, that there is clear evidence the respondent possesses documents or other materials that are relevant to matters in issue, and that there is a real possibility the respondent may destroy the documents or materials if given prior notice. A party seeking such an order is required to give an undertaking as to damages in favour of any person adversely affected by the order. An Anton Piller order may only be sought once substantive proceedings have been commenced; in that way, it differs from pre-action discovery where the prospective applicant is not yet in a position to commence a substantive proceeding.

Material obtained from the execution of an Anton Piller order cannot be used for ulterior purposes, including purposes in connection with proceedings in other jurisdictions (see, eg, Brooks Sports, Inc v Paul’s International Pty Ltd (No 2) [2011] FCA 1000).

Declaratory relief is a very common form of relief in Australian intellectual property disputes. Section 21 of the Federal Court of Australia Act 1976 (Cth) confirms the Court’s power to make declarations in any proceedings in respect of which the Court has original jurisdiction, which relevantly includes all patent infringement and revocation proceedings. The Court will usually issue a declaration together with any other final relief such as a permanent injunction, damages or an account of profits, interest, and costs.

The Patents Act also permits a person to apply for a declaration of non-infringement (Sections 125 to 127 of the Patents Act). Such non-infringement declarations may be sought at any time after the patent has been granted, regardless of whether a patentee has made any allegation of infringement. To obtain such a declaration, the applicant must first seek a written admission from the patentee that the doing of the act in question does not infringe the patent (and the patentee must have failed to give that admission), and must give full written particulars of the allegedly non-infringing act which is done or proposed to be done.

To date, Australian courts have not adopted the so-called “Arrow” declarations.

Australian law does not recognise any doctrine of equivalents.

There is no obligation in Australia to “clear the way” ahead of a new product launch.

Expert evidence is required in almost all Australian patent disputes, and, in some cases, experts from multiple fields are required. Expert evidence assists the court with construing the patent claims, assessing infringement, and determining validity issues.

Expert evidence generally takes the form of written report(s) or affidavits, followed by oral evidence at trial under cross-examination. Typically, each party will have its own expert witness from within each of the fields of technology relevant to the patent(s) in suit. Experts are typically retained by the solicitors acting for a party. Experts must agree to be bound by the Court’s Code of Conduct for Expert Witnesses, which includes a requirement that the experts remain impartial and are not an advocate for any party. The experts must also be briefed with all documents that they consider to be relevant, or identify any documents which they consider to be relevant that they have not been provided.

In patent cases, it is common for all expert witnesses who have expertise from within the same field to be required to engage in a series of conferences, in the absence of any of the parties’ representatives, known as a “conclave”. Following the conclave, they may be required to produce a “Joint Expert Report” identifying the areas of agreement and disagreement on the key issues in dispute relevant to their expertise. It is also increasingly common for expert witnesses from the same field to give their oral evidence concurrently at trial, in a process colloquially known as a “hot tubbing”.

In Australian proceedings where opposing parties are present, it is rare for the court to appoint its own expert witness.

Experimental evidence is very uncommon in Australian patent cases. The court generally discourages its use, given the broad scope for potential challenges to both the methodology and the interpretation of the results. In an appropriate case, however, there is a mechanism to tender, as evidence, experimental proof of a fact in issue.

The procedure for experimental evidence is dealt with under Rule 34.50 of the Federal Court Rules 2010 (Cth). If a party wishes to tender such evidence, they must apply for orders in relation to the experimental evidence, and may seek orders in relation to:

• the service on other parties of particulars of the experiment and of each fact that the proponent asserts is, will or may be, proved by the experiment;
• any persons who must be permitted to attend the conduct of the experiment;
• the time when, and the place where, the experiment must be conducted;
• the means by which the conduct and results of the experiment must be recorded;
• the time by which any other party (the opponent) must notify the proponent of any grounds on which the opponent will contend that the experiment does not prove a fact that the proponent asserts is, will or may be, proved by the experiment.

Discovery orders are common in Australian patent litigation. Discovery orders may be made at any time during the proceeding, but are most commonly made after the parties have filed their written evidence. The court also has a strong preference for making only narrow, targeted discovery orders, where a party is required to discover documents responsive to one or more specified categories. The party seeking a discovery order must persuade the court that the discovery order is reasonably necessary, and that the burden of complying with the order is proportionate to the importance of any documents likely to be produced and the facts in issue to which those documents relate.

Discovery orders require the discovery and production for inspection of existing documents responsive to the discovery categories that are within a party’s control, subject to any valid claim for privilege. In this context, “control” is defined as meaning “possession, custody or power”.

Australia does not use depositions. However, documents in the control of a party that record details of depositions conducted in connection with litigation in other jurisdictions (such as transcripts or video recordings) may be discoverable, subject to any objections on the basis of relevance and/or privilege.

The Patents Act contains a number of specific exemptions to infringement, namely:

• use in or on foreign vessels, aircraft or vehicles (Section 118);
• prior use (Section 119);
• acts for obtaining regulatory approval for pharmaceuticals (Section 119A) – the Australian equivalent of a Bolar-type exemption;
• acts for obtaining regulatory approval (non-pharmaceuticals) (Section 119B); and
• acts for experimental purposes (Section 119C).

In addition to the above exemptions, the court may refuse to award damages or an account of profits where there has been innocent infringement: Section 123 of the Patents Act.

Australian courts have accepted the so-called “Gillette” defence (that is, the argument that if a respondent is doing no more than something he has been doing since before the priority date, then either the patent is invalid, or the claims are not infringed).

In 2020, the High Court of Australia also recently embraced the “doctrine of exhaustion”, overturning more than 100 years of Australian jurisprudence under the “implied licence doctrine”: Calidad Pty Ltd v Seiko Epson Corporation (2020) 272 CLR 351. In an appropriate case, a respondent may avoid liability on the basis that the patentee has exhausted its rights in the articles embodying the invention as claimed in the patent.

Australian court proceedings, including patent infringement and revocation proceedings, may be stayed at the court’s discretion, in accordance with the general principles for granting a stay. An application for a stay on the basis of pending parallel proceedings in another forum is generally made shortly after the proceedings have commenced, or shortly after there is a change in circumstances giving rise to a potential entitlement for a stay.

The granting of a stay is discretionary. The considerations the court will likely take into account include that:

• an applicant is prima facie entitled to have its action tried in the ordinary course of the procedure and business of the court;
• it is a “grave matter” to interfere with that entitlement by staying proceedings, which requires justification on proper grounds;
• the burden is on the party seeking the stay to show that it is just and convenient that the other party’s ordinary rights should be interfered with;
• the court must balance the justice between the two parties, taking into account all relevant factors; and
• each case must be judged on its merits.

Foreign court proceedings generally do not constitute an appropriate basis for the grant of a stay of Australian patent infringement and revocation proceedings, including due to the domestic nature of patents and the differences in substantive patent law across jurisdictions.

Australian patents may be amended during litigation by an application under Section 105 of the Patents Act. The patentee must give notice to the Commissioner of Patents, who may appear and be heard on the question of whether the amendment should be ordered. Any amendment must also comply with the requirements for allowable amendments (see Section 102 of the Patents Act). Even if the requirements are met, the court has a discretion whether to allow the amendment, in all the circumstances, including any relevant delay by the patentee in bringing the amendment application.

Where no relevant court proceedings are pending, a patentee may apply to the Commissioner of Patents to amend the complete specification of a patent, under Section 104 of the Patents Act. Unlike an amendment application when proceedings are pending, if the Commissioner is satisfied that the amendments comply with the requirements for allowable amendments under Section 102, they must grant the amendment application accordingly – there is no power to refuse the application on discretionary grounds.

First instance patent infringement and/or revocation proceedings are generally heard by the Federal Court of Australia, constituted by a single judge sitting alone. There are no juries involved in Australian patent litigation. Formally, there is no specialist patent or intellectual property Bench; however, the judges assigned to such cases tend to be very experienced in this field.

Although the Federal Court has registries all across Australia, most of the judges with significant patent law experience are based in Sydney and Melbourne, which is where most patent litigation is commenced.

Acts of Infringement

The right to bring an infringement proceeding crystallises when a person engages in relevant infringing acts, or threatens to do so.

The relevant infringing acts for an invention that is a product are:

• making it;
• hiring it;
• selling it;
• otherwise disposing of it;
• offering to do any of the above;
• using it;
• importing it;
• keeping it for the purpose of doing any of the above; and
• authorising another person to do any of the above.

An offer to sell an infringing product, made within the term of a patent, will infringe the patent even if the intended supply pursuant to that sale is intended to occur after the patent expires.

The relevant infringing acts for an invention that is a method or process are:

• using the method or process; and
• doing any of the relevant infringing acts (in Australia) in relation to a product that results from the use of the method or process (whether in or outside Australia).

In addition, a person may infringe a patent by supplying a product, where the use of that product would infringe a patent (including any method/process patent), and either:

• that use is the product’s only reasonable use, having regard to the product’s nature or design; or
• the supplier had reason to believe that the product would be put to that use (where the product is not a staple commercial product); or
• that use is in accordance with the supplier’s instructions or inducements that were supplied or contained in an advertisement published by or on behalf of the supplier.

Infringement Exemptions for Pharmaceutical Products

Under the Patents Act, a patent is not infringed by any person exploiting the invention if the acts of exploitation are done solely for purposes connected with obtaining marketing approval. A patent is also not infringed by acts done for experimental purposes relating to the subject matter of the invention, such as improving or modifying the invention.

Recent case law has confirmed that it is not an infringement for a person to lodge an application that seeks listing of pharmaceutical products on the Schedule of Pharmaceutical Benefits (PBS), being the Government’s principal scheme for the funding of pharmaceutical products in Australia. The PBS application does not constitute an offer to supply. However, the act of lodging a PBS application is commonly relied upon as part of the factual matrix that demonstrates the PBS applicant intends imminently to exploit its pharmaceutical products in Australia and is thereby threatening to infringe the patent.

Parallel Imports

Parallel imports are not expressly dealt with under Australia’s Patents Act. In most cases, however, the parallel importation of goods that embody a patented invention will not infringe a patentee’s rights. The traditional support for that view was the implied licence doctrine – case authorities that upheld the implied right of a purchaser of goods to deal with the purchased goods as they think fit. In 2020, however, the High Court of Australia overturned decades of jurisprudence, and instead ruled in favour of the doctrine of exhaustion of patent rights: Calidad Pty Ltd v Seiko Epson Corporation. It is expected that the doctrine of exhaustion will likely achieve the same result in most cases of parallel importation, but there remains uncertainty as to how the doctrine will be applied in certain circumstances, such as where the patentee in Australia is a different legal entity to the patentee in the jurisdiction where the goods were purchased.

Under Australian law, sponsors of products containing new pharmaceutical substances enjoy a data exclusivity period of five years from the date on which marketing approval of the innovator’s product is granted. During this period, data provided to the Therapeutic Goods Administration (TGA) for the purposes of obtaining regulatory approval cannot be relied upon or referred to by others seeking approval for a generic or biosimilar product containing the same pharmaceutical substance.

In Australia, the five-year data protection period cannot be extended. The period commences from the first inclusion in the Australian Register of Therapeutic Goods (ARTG) of products containing the pharmaceutical substance, and there is no additional/extended protection even if new indications (including paediatric or other extensions of indications), new formulations, or new dosage forms/routes of administration are later approved.

Disputes in relation to data exclusivity are not common in Australia, in part because the period of data exclusivity has usually ended before the expiry of any relevant patents. The exclusivity is established as a restraint imposed on the TGA under the Therapeutic Goods Act, meaning that if the TGA intended to use relevant data during the period of alleged data exclusivity protection, an interested person may apply for administrative or judicial review of the TGA’s decision, and seek declaratory or injunctive relief to prevent the TGA from using that data until after the data exclusivity period has ended.

Australia has no formal period of market exclusivity. In practice, market exclusivity is usually enjoyed by an innovator for a limited period of time, due to the combined effect of Australian patent law and the data exclusivity arrangements discussed above.

The Australian Patents Act contains two infringement exemptions relevant to pre-launch preparations for generic and biosimilar pharmaceuticals:

• regulatory approval: a patent is not infringed by any person exploiting the invention if the acts of exploitation are done solely for purposes connected with obtaining marketing approval (Section 119A); and
• experimental purposes: a patent is also not infringed by acts done for experimental purposes relating to the subject matter of the invention, such as improving or modifying the invention (Section 119C).

Recent case law has also confirmed that it is not an infringement of a patent for a person to lodge an application that seeks listing of products on the Schedule of Pharmaceutical Benefits (PBS), being the Government’s principal scheme for the funding of pharmaceutical products in Australia. The PBS application does not constitute an offer to supply.

Australia does not have a process of associating patents with marketing approvals equivalent to the United States’ “Orange Book”.

Australia’s pharmaceutical regulatory system does contain a mechanism intended to cause patentees to be notified of relevant third-party applications for marketing approval, but it does not achieve that goal in practice. More specifically, when an applicant seeks regulatory approval for a pharmaceutical product the safety or efficacy of which the applicant seeks to establish (in whole or in part) based on information contained within another person’s Dossier – as typically occurs in the case of applications for generic/biosimilar products – then the applicant is required to certify to the TGA either:

• that the applicant, acting in good faith, believes on reasonable grounds that the marketing of its generic/biosimilar product would not infringe a valid claim of a patent (Section 26B(1)(a) of the Therapeutic Goods Act 1989 (Cth)); or
• that a patent has been granted in relation to the therapeutic goods, the applicant proposes to market the goods while the patent is in force, and the applicant has notified the patentee of the application for marketing approval (Section 26B(1)(b) of the Therapeutic Goods Act 1989 (Cth))).

In practice, sponsors of generics/biosimilars invariably elect to provide the first of these two certification options. The existence of pending regulatory applications is not made public until the application has been granted, which means that the first notice a patentee usually has about a relevant generic/biosimilar product is when the product is recorded on the publicly accessible Australian Register of Therapeutic Goods (ARTG). For this reason, patentees usually monitor the ARTG closely.

The product information available on the ARTG is generally limited, at least initially, to a two-page “Public Summary Document”, which includes the name of the active pharmaceutical ingredient, the brand name, the approved indications, the dosage form and strength, a list of excipients (but not their relative weights/proportions), and the Australian sponsor’s details. Sometime later, but before the product may be sold and supplied in Australia, the approved “Product Information” document (typically about 30 to 50 pages), and a “Consumer Medicines Information” document (typically about three to five pages) become publicly accessible.

In Australia, neither the grant of marketing authorisation, nor the listing of a product on the PBS, is formally linked to the existence/status of any patent. An innovator must generally monitor for marketing approvals having been granted for any product that may infringe the patent, and promptly engage in correspondence with the sponsor of that product to determine whether it intends imminently to exploit the product.

Where an innovator’s product is the only brand of a pharmaceutical item listed on the PBS, the innovator will also usually become aware of any third-party application that seeks the listing of a first new brand of that existing pharmaceutical item on the PBS shortly after it has been made. The innovator usually becomes aware because the Commonwealth Department of Health must usually give notice to the innovator of the Commonwealth’s intention to disclose the innovator’s confidential pricing arrangements to the third party, so that the third party may confirm whether it agrees to list its product subject to those same pricing arrangements.

Pricing and reimbursement through the PBS is indication-specific. Where a pharmaceutical item already listed on the PBS is approved for a second medical use, the sponsor must apply for PBS listing for the new indication if it wishes for the product to be subsidised in that new setting. The per-unit price for a product listed on the PBS is usually the same for all of the indications for which the product is PBS-listed.

The relevant infringing acts for biologics or biosimilars are the same as for small molecule pharmaceuticals.

The data exclusivity period for biologics or biosimilars is the same as for small molecule pharmaceuticals.

The acceptable pre-launch preparations for biologics or biosimilars are the same as for small molecule pharmaceuticals.

The publicly available drug and patent information for biologics or biosimilars is substantially the same as for small molecule pharmaceuticals, although the TGA tends to publish more information about its decisions (approvals and rejections) on marketing approval applications for biologics/biosimilars, in the form of Australian Public Assessment Reports, or “AusPARs”.

There are no material differences between the reimbursement and pricing/linkage processes for biologics or biosimilars and small molecule pharmaceuticals.

Extensions of Term for Pharmaceutical Patents

The patentee of a standard patent that relates to one or more “pharmaceutical substances per se” may apply to the Commissioner of Patents under Section 70 of the Patents Act for an extension of the term of the patent of up to five years. No other extensions of term are available; only pharmaceutical patents that meet the requirements can be extended.

Application Requirements and Procedure

The applicant for an extension of term must satisfy the Commissioner that each of the following requirements is met, namely that:

• either (or both):
1. one or more “pharmaceutical substances per se”; or
2. one or more pharmaceutical substances when produced by a process that involves the use of recombinant DNA technology,

is in substance disclosed in the complete specification of the patent and in substance falls within the scope of the patent claims;

• in relation to at least one of those pharmaceutical substances, goods containing or consisting of the pharmaceutical substance must be included in the ARTG;
• the period between the date of the patent and the date of the first regulatory approval of goods containing the substance on the ARTG must be at least five years; and
• the term of the patent must not have previously been extended.

The application must be lodged within six months after the later of (relevantly):

• the date of the grant of the patent; or
• the date of commencement of the first relevant inclusion in the ARTG.

Applications for an extension of term are open to public inspection, and, following acceptance by the Commissioner, may be opposed by any interested person. If no opposition is filed, or the Commissioner determines that the extension should be granted despite the opposition, then the Commissioner must grant the extension if satisfied that it meets the requirements outlined above: Section 76 of the Patents Act.

Duration of the Extension

The duration of the extended term, if granted, is calculated by taking the period between the date of the patent and the earliest first regulatory approval date, and reducing that period by five years (but not below zero): Section 77 of the Patents Act. This means that if the period between the date of the patent and the earliest first regulatory approval is less than five years, a non-zero extension of term will not be available.

Importantly, during the extended term of the patent, the patentee’s exclusive rights are more limited than during the standard 20-year term of the patent. Specifically, during the extended term, the patent may only be infringed by the exploitation of products for therapeutic purposes that fall within the claim(s) relating to the “pharmaceutical substance per se”. Other uses of the substance, or the exploitation of other claims of the patent (such as methods of treatment or manufacturing process claims) will not be considered an infringement during the extended term of the patent: Section 78 of the Patents Act. Finally, in the rare scenario where an extension of term is granted only after the standard term of the patent has expired, only the patentee (and not an exclusive licensee) will have rights to bring proceedings for infringements committed during the extended term: H Lundbeck A/S v Sandoz Pty Ltd [2022] HCA 4.

Paediatric extensions are not available in Australia.

See 1.3 Preliminary Injunction Proceedings for an overview of preliminary injunctions in Australia (formally “interlocutory injunctions”, in Australian parlance) (PIs).

Undertaking as to Damages

A party seeking a PI is generally required to give an undertaking to the court in favour of any person adversely affected by the PI, known as the “usual undertaking as to damages”.

The form of the undertaking required is an undertaking to the court:

• “to submit to such order (if any) as the Court may consider to be just for the payment of compensation, (to be assessed by the Court or as it may direct), to any person, (whether or not that person is a party), affected by the operation of the order or undertaking or any continuation (with or without variation) of the order or undertaking; and
• to pay the compensation referred to in [the preceding bullet point] to the person affected by the operation of the order or undertaking.”

The party is usually bound by the undertaking for so long as the PI remains in force. The scope of the undertaking extends to persons who are not parties to the litigation, including relevantly the Commonwealth Department of Health that administers the PBS. Although they are infrequent, third-party claims on the usual undertaking as to damages are brought from time to time, including on the part of the Commonwealth for lost savings it could have made under the PBS had the generic product been listed and supplied in Australia sooner.

Enforcing PIs

No bond is required on the part of a party seeking to enforce a PI. PIs are binding and enforceable from the time that they are made. Where a party reasonably requires a short period of time to achieve compliance with the PI, the terms of the PI will likely afford the person such time as is reasonable in the circumstances. A breach of an injunction is considered a contempt of court, and a party seeking to enforce the PI may approach the court for further or alternative relief in response to any actual or imminent contempt.

As PI applications may only be brought within the context of a pending substantive proceeding, there is no need to commence additional proceedings after the PI application is heard and determined. Generally, PIs are granted either on an interim basis (ie, until a specific date or event occurs, such as the next case management hearing) or, more commonly, expressed to continue “until further order”, which means that the PI will likely continue until the proceeding has been determined and final orders made.

Stay of PI

Where a party adversely affected by a PI wishes to appeal from the decision granting the PI, that party may apply to the court for a stay of the PI pending the proposed appeal. The usual principles for a stay of court orders apply (see 1.16 Stays and Relevance of Parallel Proceedings). In most cases, a stay of the PI is unlikely to be granted, because the primary judge will have already weighed up the likely adverse impact the PI would have on the restrained party.

As with PIs, final injunctions are enforceable from the time they are ordered, unless the court makes an order specifying otherwise. There is no requirement for a bond to be paid. The principles regarding the enforcement of final injunctions are consistent with those in relation to PIs (see 5.1 Preliminary Injunctive Relief).

A party may seek a stay of execution of any final injunctive relief ordered by the court in its first instance judgment, pending any appeal from that judgment. The stay application may be heard by either the primary judge or a judge of the appeal court. The stay applicant bears the burden of satisfying the court that it should exercise the discretion to grant a stay, despite the ordinary principle that a successful party is entitled to the fruits of the judgment it has obtained.

One of the key considerations in stay applications of this nature is that the appeal proceeding should not be rendered nugatory. If the stay applicant can show that the execution of the injunction would render the appeal nugatory, the prospects of obtaining the stay are higher. Another key factor is the prima facie prospects of the appeal succeeding, which will be assessed with the benefit of the primary judge’s reasons for judgment. Where an appeal has merit (as in the case of a clear error by the primary judge), the stay is more likely to be granted.

In Australia, all injunctive relief is discretionary, and may be granted in addition, or as an alternative, to any pecuniary relief that may also be awarded (such as damages or an account of profits). In most cases where a finding of infringement has been upheld, the court will grant injunctive relief to restrain the impugned conduct during the term of the patent in suit. However, occasionally the court may decline to grant final injunctive relief, on the basis that the injury to the successful party may be adequately compensated by an award of damages and it would otherwise be inappropriate to grant a permanent injunction (for example, where the judgment is delivered only a month or two before the patent in suit is due to expire).

Damages or Account of Profits

A patentee may elect to pursue a claim for damages or an account of profits (but not both): Section 122 of the Patents Act. In pharmaceutical patent cases where an innovator is suing the supplier of a generic/biosimilar product, the quantum of damages usually far outweighs the quantum of an account of profits, and the election is therefore usually in favour of damages.

Where damages are sought, the court applies orthodox principles to assessing damages in tort – seeking to put the successful patentee/exclusive licensee, so far as money can do so, in the same position as it would have been in had the infringing conduct not occurred. In circumstances where the patentee or exclusive licensee sells its own product in Australia, damages payable to that entity are often assessed by quantifying the number of additional units that would have been sold, and the higher prices at which those units would have been sold, but for the infringements.

Where a patentee itself does not sell products within the jurisdiction, but would have made more money from its local subsidiaries had the infringements not occurred (eg, by reason of a transfer pricing arrangement or distribution agreement), then the patentee will be entitled to recover its losses in the form of the reduced transfer price/distribution fee adjustments. In circumstances where a patentee has licensed multiple third parties to exploit the invention the subject of the patent, an appropriate measure of damages may instead be a notional royalty rate that the court considers to be reasonable having regard to comparable royalty agreements.

Australian courts do not typically grant interim awards of damages.

Interest

A successful applicant may enjoy both pre-judgment and post-judgment interest on a damages award. Pre-judgment interest is at the discretion of the judge. It runs from the date on which the cause of action accrues, and, subject to some rare exceptions, the cause of action for patent infringement accrues on the date on which the infringing sales occur. Pre-judgment interest is usually calculated at a rate of 4% above the most recent cash rate published by the Reserve Bank of Australia immediately prior to each relevant six-month period: Section 51A of the Federal Court of Australia Act 1976 (Cth). Post-judgment interest accrues from the date on which final judgment is entered, and is calculated at a rate of 6% above the most recent cash rate published by the Reserve Bank of Australia immediately prior to each relevant six-month period: Rule 39.06 of the Federal Court Rules 2011 (Cth).

Additional Damages

The court has a discretion to award additional damages in appropriate cases, having regard to the flagrancy of the infringement, the need for deterrence and any other relevant matters including the infringer’s conduct: Section 122(1A) of the Patents Act.

Damages for Wrongful Injunction

As noted in 5.1 Preliminary Injunctive Relief, if an alleged infringer is ultimately held not to have infringed a valid claim of the patent in suit, they may claim for compensation in the form of damages pursuant to the “usual undertaking as to damages” given by the PI applicant. Such a claim will only be heard and determined after all aspects of the substantive proceedings have been determined, including any appeals. Third parties adversely affected by the wrongful imposition of the injunction may also apply for an award of damages under the undertaking as to damages.

The general rule in Australia is that legal costs “follow the event”, meaning that a successful party is entitled to recover its costs of and relating to the proceedings. The standard costs order is for “party and party” costs, which usually equates to approximately 60–70% of the successful party’s actual legal costs reasonably incurred. However, costs are always at the discretion of the court, and bespoke costs orders are common in cases with multiple unrelated parties and/or where the parties have each had a measure of success.

The beneficiary of a costs order can usually claim for disbursements incurred in connection with the proceedings, including court filing fees and other administrative fees. Costs orders are generally made, quantified, and satisfied, after all other aspects of the substantive dispute have been finally determined. Interim costs orders on discrete issues (such as the costs of a contested interlocutory application) are very common, but, except with the leave of the court, must only be enforced after the conclusion of the proceeding.

In an appropriate case, the court may award costs on an indemnity basis (rather than on a “party and party” basis). The typical recovery rate for indemnity costs orders is approximately 75–90% of the total costs actually incurred. Indemnity costs are typically ordered only where the manner in which a party has conducted the litigation has delayed or unreasonably added to the complexity of the proceeding, or where relevant offers to settle were not accepted (such as “Calderbank” offers).

The principles relevant to costs orders have largely developed through case law, with guidance on certain procedural matters addressed in the various court rules and practice notes.

A successful claimant’s own conduct is not generally relevant to the award of damages or an account of profits. However, it is a factor that may be taken into account by the court in deciding whether to award any injunctive relief, being a discretionary remedy.

Where a claimant is successful, but has engaged in objectionable conduct (such as causing significant delays, or unreasonably increasing the complexity of the matters in issue), the court may address this conduct in the form of costs orders. For example, the court may apply a discount to the order for costs in the successful claimant’s favour, or may order that costs shall lie where they fall. In extreme cases, the court may even make an adverse costs order in favour of the unsuccessful party.

In Australia, trade mark disputes in the life sciences and pharma sector are uncommon, but not unheard of.

A trade mark owner may protect their marks by:

• registration under the Trade Marks Act 1995 (Cth);
• actions for the tort of passing off; and/or
• actions for statutory misleading or deceptive conduct, in contravention of the Australian Consumer Law, being Schedule 2 to the Competition and Consumer Act 2010 (Cth).

Applications for registration under the Trade Marks Act 1995 may be rejected if the trade mark contains or consists of an International Non-Proprietary Name of a pharmaceutical substance (INN), or if the mark has a connotation of an INN. In some cases, such an objection may be overcome by the applicant agreeing to a condition of registration that limits the use of the mark to goods containing that substance. An application may also be rejected if the trade mark contains or consists of the words “patent” or “patented”, among other proscribed terms.

In general, there are no copyright law issues specific to the life sciences and pharma sector in Australia.

However, one specific issue that is unique to this sector concerns the copying of approved product information of another drug. Section 44BA of the Copyright Act 1968 (Cth) provides that it is not an infringement of copyright for a person to do certain acts in relation to product information that has been approved under Section 25AA of the Therapeutic Goods Act 1989 (Cth). The permitted acts are, in summary, those connected with seeking marketing approval and those that involve use/communication publicly for a purpose related to the safe and effective use of the medicine. These provisions enable sponsors of generic and biosimilar products to adapt the approved product information of reference products, in certain circumstances, without requiring permission from the innovator.

Trade secret disputes arise occasionally in the life sciences and pharma sector in Australia, but court proceedings are not common. Other forms of intellectual property protection are often considered more appropriate for innovations in this field (such as patents).

The main exception is the protection of confidential information relating to pharmaceutical product formulation and manufacturing processes, where the information will not necessarily become public (or liable to reverse-engineering) upon the launch of the product in the marketplace. Such information is often treated as highly confidential, and claims for breach of confidence pursued wherever there is a threat of information being misappropriated. Where such confidential information must be disclosed in the course of patent infringement proceedings, parties invariably seek and obtain confidentiality undertakings from the recipients, and a court-ordered confidentiality regime that preserves confidentiality by prohibiting further disclosure.

Appeal From PI Decision

A decision to grant or deny an application for a PI is interlocutory, rather than final, and leave of the court is therefore required in order for any party to commence an appeal from the decision: Section 24(1A) of the Federal Court of Australia Act 1976 (Cth). An application for leave to appeal may be made orally at the time of the pronouncement of the judgment, or in writing within 14 days of the judgment in question: Rules 35.01 to 35.13 of the Federal Court Rules 2011 (Cth). In pharmaceutical patent cases, applications for leave to appeal from a decision on an PI application are typically heard and determined at the same time as the argument on the proposed appeal itself, such that the appeal court may determine the application for leave and the appeal in one judgment (assuming leave is granted).

Appeal From Judgment at First Instance

Parties have 28 days following the delivery of judgment in Federal Court proceedings to commence any appeal by filing a notice of appeal: Rule 36.02 of the Federal Court Rules. The timing for an appeal hearing is dependent on the court’s availability. The Full Court of the Federal Court (ie, the appeals division of the court) generally only sits during four separate months of the year. Where proceedings have been bifurcated such that liability is heard and determined separately and prior to the question of pecuniary relief, the appeal process on the liability issues may be completed before the matter is remitted back to the primary judge for resolution of all outstanding issues (if any).

Standard of Appeal

Appeal proceedings are generally conducted as a rehearing on the merits; they are not proceedings conducted de novo. An appellant must generally demonstrate an error of fact or law on the part of the primary judge that affected the ultimate result.

Special Leave to Appeal to the High Court

From a judgment of the Full Court of the Federal Court, a party may apply to the High Court of Australia – Australia’s highest appellate court – for special leave to appeal within 28 days of the judgment below. If special leave is granted, then the matter will be prepared for a substantive appeal before the High Court, which usually takes place in Canberra.

Implications of an Appeal for PIs

The commencement of an appeal does not automatically operate as a stay of the decision the subject of the appeal. Therefore, if a PI is granted, but the first instance judgment finds the patent invalid, the first instance judgment will discharge the PI and it would be up to the applicant whether it wishes to apply for a new PI pending the appeal proceeding.

Patent litigation appeals are typically heard by a Full Court of the Federal Court of Australia, constituted by a panel of three judges. The appeal judges are drawn from the same pool as the first instance judges. Formally, there is no specialist patent law bench, although the judges assigned to patent cases tend to have significant experience in the area.

The Federal Court has issued an Intellectual Property Practice Note, which provides guidance to litigants and practitioners involved in intellectual property proceedings. The practice note covers matters such as:

• urgent applications;
• commencing proceedings;
• case management hearings;
• use of primers;
• product, method or process description documents;
• use of experimental evidence; and
• other evidence considerations specific to intellectual property cases.

The main forums for life sciences & pharma IP disputes are the Australian Patent Office, the Federal Court of Australia, and the High Court of Australia. Australia has no equivalent to US ITC proceedings.

All standard ADR options are available for life sciences disputes in Australia. In practice, the most common ADR options are negotiations and mediations – usually conducted in parallel with court action. Binding ADR options (such as arbitration or expert determination) are uncommon in patent infringement/revocation disputes, but common in general commercial disputes within the industry sector (including patent licensing disputes).

The application of Australian competition law to pharmaceutical patent settlement agreements has not yet been the subject of judicial consideration.

However, this is an area of interest for Australia’s competition regulator, the ACCC. In March 2022, the ACCC issued a draft determination proposing to deny a request for authorisation of a settlement and licence agreement reached between Celgene, Juno and Natco regarding Celgene’s Revlimid (lenalidomide) and Pomalyst (pomalidomide) patents.